Long-Term Disability Claims and Denials in Ontario
Long-term disability (“LTD”) benefits are intended to provide income replacement when a medical condition prevents a person from working. Many employees in Ontario are covered under group disability insurance policies through their employer, while others have privately purchased policies.
Despite this, legitimate disability claims are frequently delayed, terminated, or denied. Understanding how disability insurance actually operates — and why claims fail — is important before deciding how to respond.
This guide explains how LTD claims work in Ontario, why insurers deny benefits, and what happens when a legal claim is started.
What Long-Term Disability Benefits Are
Long-term disability insurance is not a government benefit. It is a contractual insurance benefit governed primarily by the wording of the insurance policy.
An LTD policy typically pays a monthly benefit (often about 60%–70% of pre-disability income) if a claimant is unable to work because of illness or injury.
Policies may include:
• employer group benefit plans
• association plans
• individually purchased disability policies
Every policy is different. The precise wording of the disability definition controls entitlement.
The Typical LTD Claim Process
Understanding the claim lifecycle is important because many denials occur due to procedural issues rather than medical ones.
Short-Term Disability Period
Most claims begin with short-term disability (STD). This period often lasts 15–26 weeks. During this stage, medical evidence is gathered and the insurer monitors recovery.
The Elimination Period
After STD ends, most policies impose an “elimination period” before LTD payments begin. During this time, the claimant must still show they remain disabled.
The “Own Occupation” Definition
For the first 24 months of benefits in most policies, the claimant must show they cannot perform the essential duties of their own occupation.
This does not mean any job — it refers to the actual occupation performed at the time disability began.
Ongoing Monitoring
Once benefits start, the insurer continues to evaluate the claim. Claimants may be asked to provide:
• updated medical records
• attending physician reports
• treatment notes
• medication records
• functional questionnaires
Many claims are terminated during this monitoring stage.
The Change of Definition (The 24-Month Termination Point)
One of the most significant events in a disability claim occurs about two years after benefits begin.
Most policies change from:
Own Occupation → Any Occupation
At that point, the insurer only needs to conclude the claimant is capable of performing reasonably suitable employment, not their previous job.
This is one of the most common points where LTD benefits are terminated in Ontario.
Why Long-Term Disability Claims Are Denied
Insurance companies rarely state a person is not experiencing symptoms. Instead, they argue the available evidence does not prove functional impairment preventing work.
Common reasons for denial include:
Insufficient Medical Evidence
Family doctors often record symptoms but may not document functional restrictions. Insurers focus heavily on functional capacity.
Chronic Pain and Fibromyalgia
Conditions without clear imaging findings are frequently challenged, with insurers arguing the evidence is subjective.
Mental Health Conditions
Depression, PTSD, anxiety disorders, and cognitive fatigue claims are commonly terminated, especially when insurers rely on file reviews instead of in-person assessments.
Surveillance
Investigators may conduct video surveillance. Even limited activity may be interpreted as evidence of work capacity. Courts do not always agree with insurer regarding whether surveillance constitutes evidence of employability. For example, this was illustrated in Fernandes v. Penncorp Life Insurance Company (2013 ONSC 1637).
Social Media
Posts showing travel, hobbies, or activity are sometimes relied upon by insurers as evidence a claimant can work.
Independent Medical Examinations (IMEs)
Insurers may require an examination by a physician they select. These assessments often form the basis of benefit termination.
Paper Reviews
Instead of examining the claimant, insurers sometimes retain physicians to review records only. These reviews frequently disagree with treating providers.
Internal Appeals vs Lawsuits
After a denial, insurers often invite the claimant to submit an internal appeal.
An internal appeal is not a neutral review. The decision-maker remains the insurance company.
Important considerations:
• there is usually no hearing
• new evidence may be limited
• the insurer controls the process timeline
• the legal limitation period continues to run
Many claimants lose significant time attempting multiple appeals.
Many people also seek legal advice about their rights after a disability denial, which is discussed in more detail on our Ontario long-term disability lawyer page.
Limitation Periods in Ontario
Waiting too long to commence a lawsuit — even while appealing — can permanently prevent recovery.
Starting a Long-Term Disability Lawsuit
When benefits are denied, the dispute becomes a civil lawsuit for breach of contract.
The process typically includes:
Statement of Claim
A lawsuit is filed in the Superior Court of Justice seeking payment of past benefits and compensation for losses.
Statement of Defence
The insurer responds and explains why it says the claimant is capable of working.
Discovery
Both sides exchange documents and conduct examinations for discovery under oath.
Medical Evidence
Both parties may rely on medical experts, vocational experts, and functional capacity evidence.
Mediation
Mediation is when the parties come together to attempt to settle the case. Sometimes this occurs prior to discovery examinations, and sometimes after discovery examinations.
Trial
If settlement does not occur, a judge determines whether the disability definition in the policy was met.
Compensation in LTD Litigation
A successful claim may include:
• past unpaid benefits
• interest
• damages for future benefits (in appropriate cases)
• legal costs
In some cases, courts may award additional damages if the insurer’s conduct breached its duty of good faith.
When Legal Advice Becomes Important
Early legal advice may be helpful when:
• benefits are terminated near the 24-month change of definition
• the insurer schedules an IME
• surveillance is referenced
• mental health or chronic pain conditions are involved
(Here you will internally link to your Ontario LTD lawyer page.)
Conclusion
Long-term disability insurance disputes are usually not about whether a person is ill. They are about whether the available evidence proves an inability to work under the wording of the insurance contract.
Understanding the process, deadlines, and insurer decision-making allows individuals to make informed choices about whether to appeal, gather further medical documentation, or commence legal proceedings.
Links to related pages are below.